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Energy-to-telecom conglomerate Reliance Industries (RIL) limited the losses for the index on Monday. The stock rose as much as 3.40 per cent in early trade to 1,614.85, and was close to its 52-week high. They later pared most of the gains, and closed 0.96 per cent higher at Rs 1,576.75.

The stock reclaimed the Rs 10 lakh crore market capitalization-mark, but closed shy of it after erasing most of the gains.

The Mukesh Ambani-controlled company said over the weekend, it has fixed May 14 as the record date for the Rs 53,100 crore 1:15 rights issue, which is priced at Rs 1,257 per share.

Ambani’s steps to make the company debt-free despite the ongoing Covid-19 pandemic makes RIL a favourite on Dalal Street. Shares of the company recovered nearly 84 per cent to hit intraday high of Rs 1,614.85 from 52-week low of Rs 875.70 scaled on March 23.

After the Facebook and Silver Lake stake sale in Jio Platforms (JPL), RIL last week announced another deal to sell a 2.23 per cent stake in Jio Platforms (JPL) to Vista Partners for $1.5 billion. This takes the total equity flow into JPL to $7.95 billion for a total equity sale of 13.45 per cent.

Abhijeet Bora, Senior Research Analyst, Sharekhan said, “Lower capital intensity and aggregate fundraising to the tune of Rs1,20,721 crore (through stake sale in Jio platforms, right issue and JV with BP for fuel retailing) would accelerate RIL’s balance sheet deleveraging process. We have a ‘Buy’ rating on RIL.”

The rights issue of Rs 53,125 crore is likely to support RIL achieve its zero-net debt target by March 2021, even if there are delays in proceeds from Saudi Aramco and Facebook deals, as per ETIG calculations.

At the end of March quarter, RIL had an outstanding debt of Rs 3,36,294 crore. It also had cash in hand of Rs 1,75,259 crore, bringing the net debt position to Rs 1,61,035 crore.

The company on April 30 posted its biggest-ever drop in quarterly net profit on the sluggish energy business.

Net profit declined 37 per cent YoY to Rs 6,546 crore in March quarter, as a rise in consumer-facing business was not enough to shield the firm from fall in the petrochemical business and inventory losses resulting from the crash in global oil prices and coronavirus lockdown leading to demand destruction.

The core energy business of RIL could be staring at a multi-year slump, but “repositioning as a consumer/technology company” should continue to support the stock price, according to US brokerage, JP Morgan.

“Retail, Jio, the FB investment with WhatsApp partnership and, now, the comments about another potential investor in Jio Platforms provide valuation support and a case for further re-rating, in our view, as they allow investors to look beyond the near-term earnings weakness”, it added.